A corruption inquiry into former New South Wales Labor ministers has heard "implied" threats have been made against a witness.

The Independent Commission Against Corruption (ICAC) is investigating allegations that former minister Eddie Obeid and his associates stood to profit $100 million from inside knowledge about mining licences in the Bylong Valley.

It is alleged the information came from former mining minister Ian Macdonald or from staff within his office.

Commissioner David Ipp has told the inquiry that implied threats have been issued to a witness, but he did not say who the witness was.

The Commissioner said attempts to interfere with witnesses were taken very seriously and could incur a jail sentence.

Alan Coutts, the former head of the Department of Primary Industry, is now giving evidence.

Mr Coutts has told the ICAC he had a "professional" relationship with Ian Macdonald.

But he said as Mr Macdonald became more comfortable with his ministerial role, he took less advice from the department and relied more on his own advice.

Mr Coutts said the former minister did not like being told he should do things differently, but denied arguing with him.

"I wouldn't say we had arguments, we had vigorous discussions," he said.

Mr Coutts said that on one occasion Mr Macdonald showed him disrespect by shouting at him during a meeting with stakeholders at State Parliament.

"In 2008 we had a lot of issues on our plate," he said.

Mr Coutts acknowledged he was later transferred out of his primary industries job to the Food Authority in a decision that seemed "out of the blue".

Mr Coutts previously told the inquiry he was concerned when in 2008, he was directed to have 11 new coal mining areas ready for tenders within a few months.

On Tuesday, he said he did not think enough preparation time had been allowed for the tenders to get the most value from them.

The inquiry has also previously heard allegations Mr Macdonald restricted the tenders to small and medium sized companies.